Microsoft has just announced major modifications to the CSP licensing program known as the New Commerce Experience (NCE), which changes the price and license terms for their cloud services including Microsoft 365 and Office 365.
We’re in frequent contact with Microsoft, our distribution partners, and our clients to make this transition as simple and cost-effective as possible. While only a limited number of products are increasing in price, it’s important for Microsoft users to be aware of which products they are currently using, what’s changing, and how their software costs may be affected in the future as needs change.
Check out the rest of the post to learn more about the New Commerce Experience changes and what it means for businesses.
[Need some help with these changes? Request a free consultation.]
TIMELINE OF CHANGES
March 1, 2022: Microsoft is raising licensing fees by 8% to 25% on certain software. This pricing change applies only to Microsoft 365 Business Basic, Microsoft 365 Business Premium, Office 365 E1, Office 365 E3, Office 365 E5, and Microsoft 365 E3.
March 10, 2022: The capability to submit new orders within the current license program will come to an end.
June 30, 2022: All customers must transition to the new licensing program.
Customers who commit to an annual license term before March 1, 2022 will lock in their price for 12 months. We highly recommend evaluating your current plan ASAP, and moving to annual licensing to take advantage of this limited-time opportunity if it makes sense for your needs.
LICENSING TERMS & CONDITIONS
Monthly, annual, and multi-year (36 months) licensing terms are available in the New Commerce Experience.
Monthly licensing
Pros:
- Can increase or decrease the number of licenses each month as needed
- Doesn’t lock you into a long-term contract
Cons:
- 20% surcharge over annual pricing (the surcharge is in addition to the price increases)
- If the price increases, you’ll have to pay more the next month
Annual/multi-year licensing
Pros:
- 20% savings over monthly commitment
- Can be paid on a monthly basis or upfront in full
- Can purchase additional seats or upgrade to a higher license type anytime
- Lock in your price for the length of the commitment
Cons:
- Can’t decrease the number of seats or move to a lower license type until your next renewal
- Locked into the commitment for the entire term of your agreement
It’s helpful to note that monthly and annual commitments can be used together.
For example, if you have a certain number of permanent employees, you can purchase an annual agreement for their licenses to save money.
If you have temporary or contract employees, monthly licenses can be purchased for their use.
This way, you aren’t stuck paying for licenses that are no longer used since the annual plan does not allow you to downgrade license numbers each month.
New license terms
Customers in annual agreements were previously able to add or remove licenses in their subscription as needed.
Microsoft will be enforcing more stringent licensing terms for monthly, annual, and multi-year commitments, including a highly restrictive license cancellation policy.
Customers can only cancel a license within 72 hours of purchase to allow for errors in ordering or short-term modifications. After 72 hours, you will be locked into the agreement.
PRICE INCREASES
Per-seat costs for certain commercial software are increasing between 8% and 25%. Non-Profit, Education, and Public Sector licensing is not included in the price increase at this time.
The prices below reflect per-user costs when purchased with an annual commitment. Monthly prices would increase the below rates by 20% per user license.
Enterprise licenses
Office 365 E1: Increasing from $8 to $10/user per month
Office 365 E3: Increasing from $20 to $23/user per month
Office 365 E5: Increasing from $35 to $38/user per month
Microsoft 365 E3: Increasing from $32 to $36/user per month
SMB/business licenses
Microsoft 365 Business Basic: Increasing from $5 to $6/user per month
Microsoft 365 Business Premium: Increasing from $20 to $22/user per month
NEW COMMERCE EXPERIENCE CHANGES: WHAT TO DO NEXT
We recommend that customers commit to an annual term for their current licenses before March 1, 2022 to avoid cost increases for 12 months.
Our staff will be reaching out to current Techvera clients to discuss these upcoming changes. We’ll provide reporting and price adjustments based on your present usage of licenses and assist you in selecting the best licensing scenario for your business.
If you are not already a Techvera customer, we’d be happy to assist you in navigating these changes and reaching the best decision for your business needs.
For more information on Microsoft’s New Commerce Experience or for help at your organization, please contact us at info@techvera.com or 940-382-8644, or request a consultation here.
